mardi, juillet 25, 2006

Cambodia and "The curse of the Petrodolleum?"

News From Cambodia N° 0629E

CAMBODIA AND «THE CURSE OF THE PETROLEUM?»

Khemara JatiMontréal, QuébecJuly 17, 2006

Now it confirms that Cambodia possesses important deposits of petroleum and gas under its continental shelf. And it is only the beginning. The problem is to know who are going to take advantage of these wealth ?

First of all, it is necessary to try to know the real quantity of our wealth already discovered. Because can we have a full confidence in the estimations of the oil companies ? Never let us forget that the oil companies look by all means to hide the reality of their discoveries. The misery of the peoples of the Africa countries as Angola for example which possesses enormous quantities of petroleum, does not incite us to the full attentiveness?

On the other hand, there is a greediness of our neighbours. Does not Vietnam already has a foot in our oil wealth under the form of its company Sokimex ? Without mentioning the numerous complicities within the current regime.

The representative of the SRP, Yim Sovann is right to raise this question:

« Sam Rainsy Party lawmaker Yim Sovann, chairman of the National Assembly’s Anti-Corruption Commission, said Cambodia did not have a law on the oil sector or on oil income management yet, and should establish clear policy guidelines before allowing oil exploration companies to proceed any further.

“We need to have and effective law, otherwise they will explore in anarchy and income will be lost to corrupt officials,” Sovann said.

The Word Bank Cambodia’s June Newsletter described the “resource curse” as the observation that since the 1970s, countries rich in natural resource (particularly oil, gas, and minerals) had achieved a slower rate of economic growth than resource-poor countries. Oil in particular generates a huge revenue stream for a government, but the number of taxpayers contributing to the oil revenue would be small. This made a government feel less accountable of its citizens and often led to worsening governance and large-scale corruption.” (Phnom Penh Post, July 14-27, 2006)

In the Cambodia Daily of Wednesday, July 5, 2006, in its article “Chevron Ships drilling Rods to Sihanoukville” by Kay Kimsong,

“Yim Sovann said that the Assembly has not been regularly or fully informed about the exploration for oil, and called for the drafting of a law on managing oil and gas resources.

“Only a few people in government are dealing with oil and gas, such as Prime Minister Hun Sen and (Cabinet Minister) Sok An,” Yim Sovann said.

“If no law is adopted to protect crude oil and natural gas, these resources will be gone without profiting the Cambodian people,” he said.”

On the other hand, without Cambodian patriotic engineers and administrators well chosen and well paid appointed by proper and not corrupt authorities, can we totally rely on the assertions of the oil companies which tend to minimize our resources and the export reality ? As in many countries of Africa, in Angola in particular?

On the other hand in when the construction of an oil refinery and electric factories using our resources in hydrocarbon?

We reproduce below the full text of Cheang Sokha article, published in Phnom Penh Post of July 14-27, 2006.

Oil and gas exploration companies are lining up for a slice of the action in Cambodia's offshore oil field.A Chevron-Ied consortium signed an agreement with Cam­bodian National Petroleum Authority (CNPA) chairman Sok An on July 6 to begin drilling in an area 120 km off the coast known as Block A, and oil could be flow­ing in not much more than a year.

Meanwhile a Chinese com­pany and a French company have met separately with Prime Min­ister Hun Sen to express their in­terest in exploration.

But a warning has been sounded that Cambodia has yet to pass any laws controlling the exploitation of its petroleum re­serves and is in danger of falling prey to the so-called "resource curse," whereby through poor governance oil revenues could be corruptly diverted and most people receive little benefit.

Eang SophalIeth, Hun Sen's personal assistant, said Hun Sen met Charles Mattenet from French Company Total Petroleum on July 7, and Yao Pinli, public communi­cations director of the China Na­tional Oil Company, on July 3.

"Samdech Hun Sen welcomed the projects, which could gener­ate more revenue to the state bud­get, and advised them to meet with Sok An for further discus­sion," Sophalleth said.

Men Den, director of explora­tion and production at CNPA, said it was a good sign that the Chinese and French companies intend to explore for oil and gas in Cambodia, which had numer­ous oil deposits and an estimated three trillion cubic feet (85 billion cubic meters) of natural gas.

"The China National Oil Com­pany is the third biggest company in China and it specializes in ex­ploring for oil and gas," Den said.

On July 6, Sok An signed an agreement to drill in Block A with a consortium comprising the US company Chevron Oversea Pe­troleum Cambodia Ltd (55 per­cent), Japan' s Mitsui Oil Explora­tion Co Ltd (Moeco) (30 percent) and South Korea's GS Caltex (15 percent).

Chevron Texaco announced last year that its affiliate had dis­covered oil in four exploration wells in Block A. The 6,278 square kilometer block encompasses the Khmer basin, with water depths averaging 70 meters.

On June 27, Chevron Texaco Cambodia transported drilling equipment including more than 2,000 tons of cranes and rods to Sihanoukville port.

Sihanoukville port.deputy dir­ector-general Ma Sun Hout said Chevron had signed a one-year contract with the port to lease one hectare of land to store the equip­ment and the company would need roughly 15 hectares when drilling began next month. .

"The equipment will be taken to the weIl sites next month," Sun Hout said. "We will do our best to help them make the drilling process go well."

The CNPA's Den said Chev­ron had already drilled five wells since 2002 and would now start to drill other wells, but it would take more than a year to get into production.

"They are still in the studying process," Den said, "I estimate they will spend between $700 and $800 million on drilling,"

Den said several companies had looked for oil in Cambodia's offshore waters since 1992 but had withdrawn after calculating they would have to invest a lot for a limited return.

"We need to have an effective law, otherwlse they will explore in anarchy and income will be lost to corrupt officials. " - SRP's Yim Sovann.

World Bank economist Hout Chea said Cambodia could po­tentially get considerable benefit from exporting its oil and gas re­serves, but good management would be needed to keep the eco­nomy stable.

Sam Rainsy Party lawmaker Yim Sovann, chairman of the Na­tional Assembly's Anti-Corrup­tion Commission, said Cambodia did not have a law on the oil sec­tor or on oil income management yet, and should establish clear policy guidelines before allowingoil exploration companies to pro­ceed any further.

"We need to have an effective law, otherwise they will explore in anarchy and income will be lost to corrupt officiaIs," Sovann said.

The World Bank Cambodia's June newsletter described the "re­source curse" as the observation that since the 1970s, countries rich in natural resources (particularly oil, gas, and mineraIs) had achieved a slower rate of eco­nomic growth than resource-poor countries. Oil in particular gen­erated a huge revenue stream for a government, but the number of taxpayers contributing to the oil revenue would be small. This made a government feel less ac­countable to its citizens and often led to worsening governance and large-scale corruption.

The government awarded the petroleum production-sharing contract covering Block A to the Chevron Oversea Petroleum Cambodia and Moeco on August 15, 2002.

"There is a great momentum to promote the exploration, de­velopment and production of pe­troleum resources as well as to secure further international in­vestment in Cambodia' s oil and gas industry," Sok An said after the signing agreement ceremony at the time.

"We hope that exploration work by the Chevron Texaco and Moeco will succeed in finding hydrocarbons in offshore Cam­bodia and bring economic ben­efits to the people of Cambodia as weIl as to the company."